When playing the lottery, it’s important to remember that the outcome is determined by the universe and Lady Luck. Despite the slim chances of winning, we remain optimistic about drawing the lucky number and beating the odds.
We dream of winning and using our newfound wealth to better our lives and the lives of our friends, but these dreams can be dashed even faster when we discover that someone has rigged the system.
How the lottery was hacked
In 2005, a friend of Eddie Tipton, former information security director of the Multi-State Lottery Association (MUSL), made an offhand comment that set off a decade-long saga.
He joked about Eddie using his position to hack into the MUSL system and predict the winning numbers, unaware that his powerful friend would take the joke as a challenge to do so.
Eddie developed and installed a rootkit on the computer containing Hot Lotto’s random number generator. This allowed him to generate special results based on the lottery numbers drawn on specific days of the year.
Eddie spent ten years collecting prices from friends and family across multiple states, including Colorado, Wisconsin, Kansas, Oklahoma, and Iowa, which ultimately led to his downfall.
Tommy Tipton, a former Texas justice of the peace, was his main accomplice. He also recruited friends to claim lottery tickets for a cut, including the late Texas businessman Robert Rhodes.
An unclaimed Iowa lottery ticket was unexpectedly claimed by an anonymous offshore account in Belize, revealing the scheme. Because the state does not allow anonymous claims, this raised concerns and prompted an investigation.
Eddie Tipton was arrested on two counts of fraud for illegally participating in a lottery game as an employee of the MUSL and attempting to claim a prize through fraudulent means. Surveillance footage from a convenience store showed the ticket being purchased.
The following months revealed that:
- On November 23, 2005, Tipton’s brother Tommy won a $568,990 jackpot prize share in a Colorado Lottery drawing. The ticket was claimed by a friend that took a 10% cut and then transferred the money to Tommy.
- A December 29, 2007, prize of $783,257 in a Wisconsin Lottery drawing was paid to a limited liability corporation controlled by Robert Rhodes who then transferred the money to Eddie Tipton
The claim of the Iowa ticket was the final nail in the coffin for the brothers, despite other suspicious claims unrelated to them. This claim also had unintended consequences.
After Tipton’s win, a subsequent winner sued the organization, claiming that his winnings should have been higher due to the reset of the jackpot. His case was settled outside of court for an undisclosed sum.
Eddie Tipton’s trial ended in 2017 with him receiving a 25-year prison sentence for fraud and money laundering. He was also ordered to pay a $3 million fine and return $2.2 million in proven ill-gotten winnings.
Tommy Tipton, his brother, was also sentenced to 75 days in prison for his role in the scheme, but only for being an accomplice and conspiring to steal by deception. Eddie Tipton was released in 2022 after only five years in prison.
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